BROKERAGE ACCOUNT APPLICATION

Transcription

1 BROKERAGE ACCOUNT APPLICATION Sub Branch Account Number RR Number About the Application This is a Brokerage Account Application. Please read it carefully. You will select products and services, tell us how you want to communicate with us, and agree to certain provisions that will govern our relationship. When we accept it, this Application and all accompanying or supplemental documents form the entire Agreement between us for this account. We encourage you to seek personalized advice from qualified professionals regarding all investment, tax, and legal decisions. Getting Started Please complete and sign this Application, along with any required supplemental forms identifi ed through this application process. In order to complete this Application, you will need some or all of the following information: Identifi cation information, such as a driver s license, passport, or another type of government-issued identifi cation. Tax Identification Number Federal tax rate Information about your annual income, net worth, and investment experience. The above information helps us comply with various securities regulations and rules and the USA PATRIOT Act, a Federal law that requires all financial fi rms to obtain, verify, and record information that identifi es each applicant. Please note: if we cannot verify the information you provide, we may be required to restrict or deny your account. Please remember to notify us if you experience a signifi cant life change, such as the birth of a child, marriage, divorce, death of a spouse, loss of a job, change in fi nancial situation, etc. Brokerage Account Application - OPS Page 1 of 15 *FSCOPS004*

2 see explanation on page 6 of this application Do not print and fill out this application - Find the appropriate forms online Sub Branch If you would like to use these Account Number RR Number services with this account, check one or both boxes BROKERAGE ACCOUNT APPLICATION Account carried and cleared by First Southwest Company You can fund your account later, but if you wish to fund it IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNTnow, send in a check or ACH To help the government fight the funding of terrorism and money laundering activities, the USA Patriot Act requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. What this means for you: When you open an account, we will ask for your name, tax identification number, form with address, your date application of birth, and and other information that will allow us to identify you. We may also ask to see your driver s license or other identifying documents. note the amount here. 1. SPECIFY SERVICES (ALL BROKERAGE ACCOUNT TYPES ARE ACCESSIBLE ONLINE) Account Type If no boxes are checked, your account will be opened as a cash Banking Services (Money Fund Accts Only) only account. NOTE: Your request for a margin account is Cash Only Cash/Margin subject to review. See explanation on page 6 Check Writing VISA Debit Card How will you fund your account? (A 5-day credit hold may apply) Choose whatever is best for you Initial Transaction Amount Check (Payable to First Southwest Company) Wire Transfer (ACAT Form Required) $ Registration (*Accounts denoted with an asterisk require additional documentation. Call for details. + Accounts denoted with a plus sign, please see the Customer Agreement, Paragraph 30.) (Choose one) Individual Joint Tenants with Rights of Survivorship (JTTEN) + Investment Club* Custodian Trust* LLC* S-Corporation* Partnership* Community Property + Joint Tenants in Common (TENCOM) + T.O.D. (Transfer on Death)* C-Corporation* Sole Proprietorship* IRA*: Rollover SEP Keogh Other Account Instructions: Money Pay Sweep Interest Daily Income Fund CA Tax Free Stock Hold Hold U.S. Government Bank Insured Deposit Program Request Certificate* Dividends Pay Municipal Portfolio (*Additional fees Hold International may apply) 2. TELL US ABOUT YOU - Account Holder (If custodial account, enter minor s information and Social Security Number as primary account holder here, enter custodian information in Co-Account Holder section on page 2.) Name Individual Social Security Number (SSN) or Tax ID (TIN) Birth Date Entity (Includes Name of Business, Partnership, Trust or Third Party Trustee Information) (If applicable) Mailing Address (If P.O. Box, must have physical legal address) Physical Legal Address City State Zip Country U.S. Citizen Citizen of Marital Status Number of Are you known by any other name? Married Single Divorced Widowed Dependents Yes No If YES, State Name Home Phone Business Phone Address Driver License or Passport Number include jurisdiction of issuance Employed Unemployed Retired Student Employer (If Self, Type of Business) How Long? Occupation Employer Address (If P.O. Box, must have physical address) Account Holder Bank Reference My Federal Income Tax Bracket is List any Brokerage Accounts held at other Securities Firms. % Is either Account Holder or any family member - A director, 10% shareholder or policymaking officer of a publicly traded company? Yes No Company CUSIP - Affiliated with any securities firm, bank, insurance company or trust company? Yes No If yes to either, provide the Company s Name and Company s stock CUSIP if applicable. Company Name This should be your bracket for your last filing. You can find more information at Brokerage Account Application - OPS Page 2 of 15 *FSCOPS004*

3 Account Number CO-ACCOUNT HOLDER (If custodial account, enter minor s information/social Security Number in Account Holder section above, enter custodian information here.) Name Individual Social Security Number (SSN) or Tax ID (TIN) Birth Date Entity (Includes Name of Business, Partnership, Trust or Third Party Trustee Information) (If applicable) Mailing Address (If P.O. Box, must have physical legal address) Physical Legal Address City State Zip Country U.S. Citizen Citizen of Marital Status Number of Are you known by any other name? Married Single Divorced Widowed Dependents Yes No If YES, State Name Home Phone Business Phone Address Driver License or Passport Number include jurisdiction of issuance Employed Unemployed Retired Student Employer (If Self, Type of Business) How Long? Occupation (Check appropriate boxes) Employer Address (If P.O. Box, must have physical address) Account Holder Bank Reference (The name of your bank) List any Brokerage Accounts held at other Securities Firms. Is either Account Holder or any family member - A director, 10% shareholder or policymaking officer of a publicly traded company? Yes No Company CUSIP - Affiliated with any securities firm, bank, insurance company or trust company? Yes No If yes to either, provide the Company s Name and Company s stock CUSIP if applicable. Company Name My Federal Income Tax Bracket is Find your tax bracket at % INVESTMENT OBJECTIVES Investing involves risk. Different investment products and strategies involve different degrees of risk. The higher the expected return of a product or strategy, the greater the risk that you could lose most of your investment. Investments should be chosen based on your objectives, timeframe, and tolerance for market fluctuations. Rank the investment objectives for this account 1-5 in order of importance, 1 being highest priority. 1 A. Speculation I am willing to accept maximum risk to my initial principal to aggressively seek maximum returns, and I understand I could lose most, or all, of the money invested. 2 B. Growth/Capital Appreciation I am willing to accept high risk to my principal, including high volatility, to seek high returns over time, and I understand I could lose a substantial amount of the money invested. 3 C. Aggressive Income I am willing to accept some risk to my initial principal and tolerate some volatility to seek higher returns, and I understand I could lose a portion of the money invested. 4 D. Income I am willing to accept low risk to my initial principal, including low volatility, to seek a modest level of portfolio returns. 5 (Put 1-5 in order as shown) E. Preservation of Capital I want to preserve my initial principal in this account, with minimal risk, even if that means this account does not generate significant income or returns and may not keep pace with inflation. Brokerage Account Application - OPS Page 3 of 15

4 Please complete the following information as required by Rule 17a-3(a)(17) of the Securities Exchange Act of 1934, as amended. In compliance with the requirements of the Rule, the information provided will be sent to the customer. Account Number FINANCIAL INFORMATION FSC and/or the Broker require the following financial information pursuant to regulatory directives and to assist FSC and/or the Broker in determining your investment needs. Your financial information is kept in the strictest confidence. For Joint Accounts please use combined amounts. Approximate Annual Income (Select One) $0-24,999 $25,000-49,999 $50,000-99,999 $100,000 + (List if over $100,000, $ ) Net Worth (Assets minus Liabilities, not including Primary Residence) (Select One) (Net Worth must be more than Liquid Net Worth) $0-29,999 $30,000-49,999 $50,000-99,999 $100, ,000 $500,000 + (List if over $500,000), $ ) Liquid Net Worth (Cash, Stocks, etc. - Net Worth assets easily converted to cash) (Select One) $0-29,999 $30,000-49,999 $50,000-99,999 $100, ,000 $500,000 + (List if over $500,000), $ ) Investment Time Horizon (Select One) Less than 1 year 1-5 yrs 5-10 yrs yrs 15 + yrs Investment Experience (Select Letter Indicating Years of Experience A = 0 years B = 1-5 years C = More than 5 years) Stocks Bonds Options Mutual Funds (Be honest - It is ok to have no experience) Liquidity Needs (When is the earliest you expect to need funds from this account) Less than 1 year 1-5 yrs 5-10 yrs yrs 15 + yrs Regarding your Liquidity Needs; Approximately, how much of the account do you expect to need? 10% 25% 50% 75% 100% Investment Risk Tolerance (Select One) Conservative Moderate Aggressive Day Trading 3. ACCOUNT AGREEMENT (READ AND SIGN) By signing below, you confirm your intention to reinvest cash credit balances held by FSC in your name, and you further confirm that this cash credit balance is being maintained with FSC solely for the purpose of reinvestment. You understand that cash balances of up to $250,000 are protected by Securities Investor Protection Corporation (SIPC), but SIPC coverage is not available for funds maintained solely for the purpose of earning interest. DISCLOSURE OF NAME/ADDRESS ON SECURITIES YOU OWN Under Rule 14b-1(c) of the Securities Exchange Act of 1934, as amended, FSC is required to disclose to an issuer the name and address, and securities position of its customers, or customers for which FSC clears transactions, who are beneficial owners of that issuer s securities unless the customer objects. Please check the box below if you do not want your ownership disclosed. I object to the disclosure of such information. (Check Individual/Sole Proprietor unless this is an entity application) CERTIFICATION OF TAPAYER ID NUMBER (SUBSTITUTE W9) Check appropriate box: Individual/Sole Proprietor S-Corporation C-Corporation Partnership Other Exempt Payee Under penalty of perjury, you certify that: (1) the number shown on this form is your correct Social Security Number (SSN) or taxpayer identification number (TIN) or you are waiting for a number to be issued to you; and (2) you are not subject to backup withholding because: (A) you are exempt from backup withholding, or (B) you have not been notified by the Internal Revenue Service (IRS) that you are subject to backup withholding as a result of failure to report all interest or dividends, or (C) the IRS has notified you that you are no longer subject to backup withholding; and (3) you are a U.S. person (including a U.S. resident alien). Certification Instructions You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item (2) above does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign this certification, but you must provide your correct SSN or TIN. BY SIGNING BELOW, YOU AGREE TO ALL TERMS OF THE CUSTOMER AGREEMENT INCLUDED WITH THIS ACCOUNT APPLICATION. YOU ACKNOWLEDGE RECIEPT OF A COPY OF THIS ACCOUNT APPLICATION AND THE CUSTOMER AGREEMENT. YOU UNDERSTAND YOU CAN REVIEW A COPY OF THE ENTIRE CUSTOMER AGREEMENT AT ANY TIME BY ACCESSING YOU CERTIFY THAT YOU HAVE READ, UNDERSTAND AND AGREE WITH ALL PROVISIONS OF THE CUSTOMER AGREEMENT. THE CUSTOMER AGREEMENT BENEFITS FIRST SOUTHWEST COMPANY, INTRODUCING BROKERS FOR WHICH IT CLEARS TRANSACTIONS AND PERSONS RELATED TO EACH OF THE FOREGOING. WITHIN THE CUSTOMER AGREEMENT, PARAGRAPH 30 CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE. Signature of Account Holder Date Signature of Co-Account Holder Date Is the account executive registered in the customer state? Yes No AE Signature AE Number Date Authorized Principal Signature Date Brokerage Account Application - OPS Page 4 of 15

5 If securities are to be held for your Account in street name, FSC will receive your dividends or interest and credit them to your Account on or shortly after the payment date or when received. FSC will endeavor to notify you of any subscription rights FSC receives for your Account; however, no guarantee can be made that the notice will be given or that it will be given in a timely manner. FSC, by agreement with Automated Data Processing, Inc. ( ADP ) will forward to you all proxy material, including annual reports, quarterly reports and notices of meetings. FSC is under no obligation to forward any material to you unless FSC is reimbursed by the issuer of the securities for the expenses incurred in mailing this material. 2. Back-Up Withholding. Your Broker is required by law to withhold back-up withholding, at a rate mandated by law, on taxable interest, dividends and other taxable income payments, as well as proceeds from the sale of securities, if you fail to furnish FSC with your correct social security number or taxpayer identification number. For most individuals, the tax payer identification number is their social security number. To prevent back-up withholding on these funds, FSC must receive a completed Account Application form, which includes a W-9 form, within 30 days after the date the Account is opened. Once back-up withholding is implemented with respect to a particular Account, it may not be discontinued or reversed. You must properly certify that you are not subject to back-up withholding under Section 3406(a)(1)(c) of the Internal Revenue Code of 1986, as amended (the Code ). If you are not a citizen of the United States and are exempt from this withholding, you must obtain an appropriate W-8 form and file it with FSC. 3. Cash Account. In a Cash Account, there is no extension of credit made in connection with the purchase of securities, and you must pay in full for any security that you purchase. Federal Reserve Board s Regulation T and certain other regulations make it necessary to settle the purchase or sale of securities by the settlement date or within the required payment period. When a security is purchased for your Account, FSC must pay the selling broker on the settlement date and, when it does so, you will be responsible for reimbursement to FSC of the amount so paid, plus interest thereon and other costs associated therewith, if any. When a security is sold for your Account, FSC must deliver the certificate on the settlement date. You and your Broker are responsible for compliance with Federal Reserve Board s Regulation T. When you purchase a security, FSC must receive prompt payment. Checks must be made payable to First Southwest Company and mailed to 325 North St. Paul Street, Suite 800, Dallas, Texas Your Broker can advise you of the exact amount due shortly after any purchase. A written notice of the transaction will be mailed to you as soon as possible after your order has been executed. Since purchases must be paid for within the required payment period or by the settlement date, you should not await the arrival of the mailed confirmation before paying. In the event that payment for securities is not received within the required payment period, your securities may be liquidated in accordance with the provisions of Federal Reserve Board s Regulation T. You will be responsible for any resulting deficiency or loss, and FSC may charge interest on any debit balance in the Account at the same rate as applicable to margin accounts, in its sole discretion. When you sell a security, it is essential that you deliver the certificate(s) to FSC promptly, since the proceeds of a sale cannot be paid to you until full settlement of the transaction has occurred (and then only if FSC has received your certificate in good deliverable form). In order for your certificates to be in good deliverable form, you must either sign the certificate on the back thereof or a stock power, in either case exactly as it appears on the front of the certificate (both parties must sign if registered jointly). Additional documentation may be required if there are any variations, such as for corporations, partnerships, trusts and estates. FSC provides no assurances that your certificates will ever be or become in good deliverable form. Negotiable securities must be in your Account prior to entering a sale order for those securities. 4. Interest on Cash Balances. FSC will pay interest on cash balances carried in your Account that are pending investment or reinvestment when the monthly accrual is $2.00 or greater. For your Account to be credited with interest, you must sign the Account Application form, specifying that funds left in your Account are pending investment. The annual rate of interest paid on a credit balance is generally determined by the cost of borrowing money. The rate is related to short-term money market instruments; however, it is not tied directly to any standard such as the prime or the broker call money rate. The rate is set solely at FSC s discretion. 5. Margin Account. Subject to applicable rules and regulations and the terms hereof, FSC will allow you to purchase securities on margin. A Margin Account involves the extension of credit to you by FSC relative to the purchase of a security or the disbursement of funds. Your margin eligible securities are placed in your Margin Account as collateral for your loan. Your Account with FSC will be opened as a Cash Account unless you specify otherwise on your Account Application or complete a Customer Margin and Short Agreement. There are two basic requirements for a Margin Account. First, there is an initial margin requirement at the time of purchase. Thereafter, there is a minimum amount of margin equity that must be maintained in your Account. In most cases, the minimum amount due for initial purchases is established by the Federal Reserve Board in accordance with Regulation T. This requirement is defined as a percentage of the purchase price and it may change periodically. For example, if the margin requirement is 50% when you purchase securities, you are only required to deposit 50% of the total purchase amount. The balance due on the purchase will be loaned to you by FSC and your Account will be debited for that amount. You are required to pay interest on the debit balance as you would on any other loan. The securities you buy on margin are held by FSC and are collateral for your debt. Although FSC retains your securities as collateral, you receive credit for all dividends or interest, and you may direct your Broker to sell or vote your stock, as you decide, if your Account is in good order. In addition to the Federal Reserve Board s initial margin requirements, other regulatory agencies require that a customer opening a Margin Account have a minimum initial equity of $2,000 in the account. For example, if the initial purchase of securities costs $2,400, the deposit required is $2,000, rather than the $1,200 required by the Federal Reserve Board (assuming the Regulation T requirement is 50%). Certain regulatory agencies also set the minimum margin maintenance requirements. Under present rules, the margin equity that must be maintained in an Account is based upon a percentage of the market value of all securities held long in the Margin Account. FSC may set Brokerage Account Application - OPS Page 6 of 15

6 margin requirements and maintenance levels above those mandated by the regulatory agencies, and such requirements and levels must be strictly adhered to at all times. If the equity in your Account falls below FSC s defined levels due to a decline in the market value of the securities in your Margin Account as a whole, it will be necessary for you to deposit additional marketable securities or make a cash payment to reduce your indebtedness. Currently, FSC will not permit you to purchase on margin, or deposit as margin collateral, securities having a market price under $3.00 per share without the prior approval of FSC. Once a security is purchased on margin, if the value of the security falls below $3.00 per share, you will generally not be permitted to use that security as collateral. For other securities, such as bonds, there may be a higher or lower requirement, depending on the security. FSC s maintenance requirements may change at any time without notice, and FSC may, in its sole discretion, require higher margin or maintenance levels for selected securities or all securities if FSC deems it necessary or appropriate for any reason (e.g., when there is an over-concentration in a particular security or market segment). If your equity falls below FSC s margin maintenance requirements, or if the margin in any of your Accounts shall be or become unsatisfactory to FSC for any reason, you may receive a notice of a maintenance call informing you of the additional collateral or other action required to increase your Account balance to an acceptable level or to otherwise achieve acceptable compliance. Should you fail to meet a maintenance call, sufficient securities may be sold from your Account to meet your obligations to FSC. Market conditions and other circumstances often make it impractical for FSC to send you a maintenance call notice, since the volatility of the situation may require immediate action by FSC. In such cases, FSC may not notify you prior to taking an action it deems appropriate in order to protect its interests (this may include selling any or all of the securities in your Account). FSC is not required to send a maintenance call, prior notices of a maintenance call should not be construed as a waiver of FSC s right to take immediate action in your Account. 6. Short Sales. A short sale is a transaction in which you sell a security you do not own. Prior approval from FSC is required on all short sales. You and your Broker are responsible for determining whether or not the particular security you wish to sell short may be borrowed. FSC will assist in the transaction by borrowing the security on your behalf for delivery to the purchaser; however, FSC assumes no responsibility for determining the availability of the security and does not make any assurances that the security will, in fact, be available to cover the short sale. Short sales may only be made in accounts authorized for margin transactions and are subject to special margin and maintenance requirements as noted below. To complete a short sale, FSC must be able to borrow the securities you are selling short in order to cover the delivery to the purchaser. If FSC is unable to borrow the securities, or to re-borrow the securities following a recall by the lender of the securities, FSC may cover your short position by purchasing the securities on the open market at the current market price without any notice to you. You will be liable to FSC for any losses and costs incurred by FSC associated with the close out of a short position. The credit appearing on your statement as a result of a short sale (including a sale against the box, meaning a short sale with securities held long in your Account) is often offset by a debit of like amount. The credit generated by a short sale does not reduce your debit balance for the purpose of computing interest until the short position is covered. Your short credit may be reduced substantially or possibly lost altogether when you cover your short position by purchasing the security. There are special margin requirements on a short sale. Regulatory agency rules presently require margin maintenance on a short sale to be a specified percentage of the market value of the security when it sells at or above a specified price per share (FSC s current rate is higher than current regulatory rules), and a higher percentage for securities selling below that price. FSC reserves the right to alter its own maintenance levels at any time without prior notice. If the security sold short, or short against the box, appreciates in market price over the selling price, interest will be charged on the appreciation in value. If the security sold short depreciates in market price, interest on any debit balance in your Account is reduced according to the depreciation in value. The daily closing price is used to determine any appreciation or depreciation of the security sold short (this practice is referred to as marking-to-the-market ). You and your Broker have the responsibility, and you hereby agree, to designate as a short sale any order to sell a security that you do not own, and you understand that FSC will mark such order as a short sale. Any order that you do not specifically designate as a short sale will be treated for all purposes as a sale of securities owned by you, and if you do not have the securities in your Account, such a sale is in violation of the terms of this Agreement. In any event, you agree that you will deliver the securities so sold on or before the settlement date. If you fail to make such delivery in the time required, FSC is authorized to borrow such securities as necessary to make delivery for your sale, and you agree to be responsible for any loss FSC may sustain as a result of its inability to borrow such securities or the resulting close out of the short position. 7. Interest Charges for Margin Accounts. The rate of interest charged on the debit balance in your Account is determined by FSC s cost of borrowing money. The rate is related to short-term money market instruments, but is not tied directly to any standard, such as the prime or the broker call money rate. The rate is set solely at the discretion of FSC and may be changed without prior notice. 8. How Interest is Calculated. Interest is computed on a daily average basis on net debit balances. Each day s debit balance is accumulated into a monthly total. The total debit balance in the period is then averaged to determine the debit balance on which interest is charged. An offsetting free credit balance in a cash account serves to reduce this total. The interest period ends on the last business day of the month, except in December which is carried through December 31. Interest is computed by multiplying the average daily debit balance by the average interest rate (1/360 of the annual interest rate) times the number of days in the interest period. If there is a change in interest rates affecting your Account during an interest period, interest at the new rate will be averaged to determine the rate of interest to be charged on your debit balance. 9. Security Interest. You hereby grant to FSC a first and prior lien and security interest in all securities and other property (as defined below), now or hereafter held, carried or maintained by FSC in or for any of your Accounts, now or hereafter opened, including any Accounts in which you may have an interest, as security for the payment and discharge of all of your Obligations (as defined below) to FSC, to be held by FSC as security for the payment of your Obligations to FSC, to the fullest extent allowed by law. FSC shall have the right to transfer securities and other property so held by FSC from or to any other of your Accounts whenever FSC so determines. As used in this Customer Agreement, Obligations means all indebtedness, debit balances, liabilities or other obligations of any kind that you may have to FSC, whether now existing or hereafter arising and regardless of the manner in which same arose, were created or are maintained, all of which Obligations shall be, unless Brokerage Account Application - OPS Page 7 of 15